Interest Rate: borrow 275$ today and pay 330$ in two weeks.

JTLEWIS2

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Dec 18, 2016
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Payday loans are very short term loans with high interest rates. You can borrow 275$ today and pay 330$ in two weeks. What is the compounded ANNUAL rate implied by this 20% rate charged for only two weeks?

Thanks for the help, I'm assuming Im looking for the EAR, effect annual rate, EAR = (1+APR/M)^m-1 but confused on how to calculate this. Thanks
 
Payday loans are very short term loans with high interest rates. You can borrow 275$ today and pay 330$ in two weeks. What is the compounded ANNUAL rate implied by this 20% rate charged for only two weeks?

Thanks for the help, I'm assuming Im looking for the EAR, effect annual rate, EAR = (1+APR/M)^m-1 but confused on how to calculate this. Thanks
Are "M" and "m" supposed to be the same? Compounded over what interval? Every two weeks?
 
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